The spokesperson for the Biden administration says Silvergate is yet another crypto-related firm experiencing "significant issues."
Silvergate Bank, a Californian bank that specializes in providing financial infrastructure to the cryptocurrency trading industry, is on the verge of failure.
Shortly after the bank announced that it had suspended its Silvergate Exchange Network (SEN), the White House spokesperson revealed White House was "aware of the situation."
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According to Karine Jean-Pierre, White House Press Secretary, the Biden administration would not specifically discuss Silvergate. However, she noted that it was yet another major crypto firm to “experience significant issues.”
Biden administration spokesperson stated that authorities instructed Congress to take action on crypto. She said:
This is a president that has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets and he will continue to do so. We won’t speak to this particular company as we have not with other cryptocurrency companies, but we will continue to monitor the reports.
Silvergate's downfall started after the bank announced a delay in filing its annual 10-K report by 14 days. Shortly after this announcement, the stock prices of Silvergate Bank fell by over 30%. On top of that, on March 2nd, crypto exchange Coinbase said it is cutting its ties with Silvergate.
Other players in the crypto world, including Paxos, Circle, Tether, Galaxy, and MicroStrategy, have followed Coinbase's footsteps and terminated their partnerships with the bank.
During a recent interview with CNBC, economist Noelle Acheson suggested that the collapse of Silvergate could give a green light to authorities to clamp down on crypto. According to Acheson, most of the turmoil in the crypto industry in 2022 has been "contained within the crypto industry." However, Acheson added:
If Silvergate goes under then the regulators will be able to say ‘aha, systemic risk, we told you so.’ That will give them even more ammunition to go after crypto and increase their choke on fiat access for crypto businesses.
At the time of writing, trading for Silvergate stocks is open at $5.38.
